Ballymore Properties Debt Level Questioned By Some Authorities

Ballymore Properties, the moderately sized UK property development company, has had some people questioning the debt level of the company, according to recent filings of the company’s financial statements. The boss of the company is Sean Mulryan. He has presented a small percentage of personal guarantees which cover only a very small percentage of the total debt load given over to NAMA. This interesting development comes as Ballymore Properties is about to embark on several new properties in London and the rest of the United Kingdom.

NAMA is the National Assets Management Agency which was created during the property and financial crises. It takes the bad property loans that banks made and issues government bonds. These bonds added with the presence of the removal of the bad loans makes the banks solvent and capable of issuing more credit to consumers so that consumers can resume their borrowing. This is designed to jump start the whole economic system, but leaves many questions for those in the UK who have been watching NAMA. When NAMA takes on a bad debt, which often totals in the hundreds of millions of pounds, how does it deal with the debt? The data is still not known, because the time table in which NAMA has to deal with the debts is much longer than that of private banks.

Banks often must deal with these bad loans immediately, taking up their time and budgets chasing down bad loans. With NAMA taking over, these debts are then managed by the Agency, leaving the banks free and clear to make more loans. This causes many people in the UK to ponder where the debt ends up. In the case of Ballymore Properties, the company has shown that it only had personal guarantees of only £25 million. The total debt load when it was transferred to NAMA last year was £1.55 billion.

The reports which brought these startling numbers to light are found in reports filed by the company recently in the UK. The reports show that Ballymore Properties did pay down part of its debt, estimated at £437 million. Directors of the new company which owns Ballymore Properties are confident that new plans for the company will be approved soon. These plans include new development projects for Ballymore as well as the disposal of certain non-core assets. In addition, the company has said it will repay more of its debt over the course of the next few years. One of the bright spots for the company is that it’s Pan Peninsula development which is located in London was profitable, allowing the company to pay down its net debt by £333 million.

Things are looking good for the future of Ballymore as it has already begun work on a number of new building sites which it thinks will be quite profitable. While this is good news for those with a stake in Ballymore, the overall idea of NAMA taking on loads of debt has caused many in the UK to question the financial system commonly accepted in most Western countries.